Ruminations on systemic economic and social change

Tag Archives: development

For the last years I have had the privilege to take part of and contribute to Mesopartner’s journey into the field of complexity. We started to dismantle and question almost every aspect of our instruments, tools and theories. This journey has been very much in line with my own work, pondering how complexity theory can contribute to making economic development more effective and sustainable.

One of the results of this process is the Systemic Insight website, where we want to share our thoughts and invite our followers to contribute to the discussions we have (and where some of my blog posts are also cross-posted).

A new Mesopartner Working Paper now provides a theoretical grounding for the work we have done and will continue to do. Together with my co-author and friend Dr. Shawn Cunningham (who’s blog I highly recommend), we consider some definitions, ponder the implications and try to formulate some responses to some of the key challenges that systems and complexity theories confront us with in our field of bottom up economic development.

We see this paper as an input into a broader discussion with our close collaborators, our close clients, and the broader network that we form part of. I would like to ask you to send us your thoughts and add your comments to this and future posts.

What else to do on an early Sunday morning than listening to some baroque music and catching up with some blogs. Here a couple of things I found interesting from a complexity perspective. Continue reading →

The talk tells a persuasive story of what has gone wrong in international development and in the various models of growth it used; that the adoption of the concepts of adaptation and co-evolution allow for much more accurate models; a brief description of complex adaptive systems and complexity theory; and what consequences these insights have for development policy. But these positive turns in development come for a price: we can no longer ignore that we – the developed nations – are also a part of the larger system and that our (policy) actions strongly influence the development potential of poor countries. It is no longer enough to ‘send money’ and experts and think that this will buy us out of our responsibilities towards those countries.

I want to quickly summarize what I think are the key points of Owen’s presentation, starting with what seems to me an obvious point:

Development is not an increase in output by an individual firm; it’s the emergence of a system of economic, financial, legal, social and political institutions, firms, products and technologies, which together provide the citizens with the capabilities to live happy, healthy and fulfilling lives.

Owen talks about various (economic) models and theories that have neglected this systemic perspective and, subsequently, failed to deliver successes in development. The focus of the economic models shifted over the years from providing capital and investment to technology.

Since this approach of ‘provision’ did not work out, the lack of favorable policies was blamed for hindering the market to achieve its theoretical potential. As a consequence, the Washington Consensus introduced which policies needed to be adopted by a country to be able to grow. As we know, this also did not work out, although the Washington Consensus did, according to Owen, have some positive impacts in developing countries.

After the Washington Consensus, development agencies focused on weak institutions and spent (and are still spending) huge amounts of money on institutional strengthening and capacity building initiatives. The results have been modest. Adding to the difficulties is the fact that it is still not clear which institutions are really important for development.

Most recently, a new book published by Daron Acemoglu and James A. Robinson (Why Nations Fail) promotes politics as culprit of failing development. According to them, the institutions are weak because it actually suits the elite that is in power to run them like this [what an insight …!!!]

All these models that were applied were actually based on traditional economic theory. After seeing all these approaches fail, Owen switches to a new way of describing economic development, based on adaptation and co-evolution in complex adaptive systems.

After making a compelling argument why complexity theory can actually better describe the real economy out there, Owen describes seven policy implications deducted from that insight.

Resist engineering and avoid isomorphic mimicry. The first point mainly stems from the fact that solutions developed through evolution generally outperform design. The latter point mainly implicates that institutions that were mainly built after a blueprint following ‘best practices’ but do not connect to the local environment will have not much use.

Resist fatalism. Development should not be seen as a pure Darwinian process. Smart interventions by us can accelerate and shape evolution.

Promote innovation.

Embrace creative destruction. Innovation without selection is no use. Feedback mechanisms to force performance in economic and social institutions are necessary.

Shape development. The fitness function which the selective pressure enforces should represent the goals and values of a community.

Embrace experimentation. Experimentation should become a part of a development process.

Act global. We need to make a bigger effort to change processes that we can control, for example international trade, the selection of leadership in international organization, etc.

Owen is not telling any news in his presentation, but he succeeds to develop a compelling storyline on why complexity theory is relevant for development and why processes that are based on adaptation and co-evolution much better describe why some countries develop while other seem stuck in the poverty trap.

In my view this is an immensely important contribution to the discussion on how we can reform the international aid system to live up to our responsibility of enabling all people on this planet to live happy and fulfilled lives.

I have not been around for a while, so my blog has remained dormant. But I have not abandoned it! I will try to keep posting more often again.

This post is about a paragraph of a book that I have started reading recently. The book is called ‘Harnessing Complexity’ and the authors are Robert Axelrod and Michael D. Cohen. The paragraph says:

Analyzing complex systems within [our] framework does not assure the ability to produce specific outcomes but can foster an increase in the value of populations over time.

This statement made me thinking if this is actually the dilemma we face when we want to apply principles of complexity sciences to development – or other real-world cases, for that matter. In development, we need to specify outcomes we want to achieve within a given time frame and we need to build a system that enables us to measure and report about the achievement of these outcomes. Now if the use of frameworks informed by complexity sciences does not target the achievement of specific outcomes but more generally the increase in the value of populations over time (in the case of development that would be what we call ‘well-being’), than it will be hard to sell these projects to donors. We cannot go there and tell them ‘Our goal is to make the world a better place but we don’t have any specific outcomes nor a clear time frame to achieve that goal.’

I do not really have an answer to that dilemma right now. Any thoughts out there?

This blog post is about what I see as one of the most important papers linking the complexity sciences to development and humanitarian efforts – at least it is for me personally, but I think it also takes a very important position in the discussion in general.

The paper has the title ‘Exploring the science of complexity: Ideas and implications for development and humanitarian efforts’ and is authored by Ben Ramalingam (author of the blog Aid on the Edge of Chaos) and Harry Jones with Toussaint Reba and John Young. The paper can be downloaded here.

Why do I think is the paper so important? For me personally it was the first paper I read that explicitly linked the two domains (complexity science and international development) and it does that in a very comprehensive and systematic manner.

Ramalingam and colleagues go back to the origins of complexity sciences and put it into context by showing applications in the social, political and economic realms. They unpack the complexity sciences and present them in ten key concepts divided into three sets, i.e., complexity and systems, complexity and change, and complexity and agency. Here an overview taken from p 8. of their paper:

Complexity and systems: These first three concepts relate to the features of systems which can be described as complex:

Systems characterised by interconnected and interdependent elements and dimensions are a key starting point for understanding complexity science.

Emergence describes how the behaviour of systems emerges – often unpredictably – from the interaction of the parts, such that the whole is different to the sum of the parts.

Complexity and change: The next four concepts relate to phenomena through which complexity manifests itself:

Within complex systems, relationships between dimensions are frequently nonlinear, i.e., when change happens, it is frequently disproportionate and unpredictable.

Sensitivity to initial conditions highlights how small differences in the initial state of a system can lead to massive differences later; butterfly effects and bifurcations are two ways in which complex systems can change drastically over time.

Phase space helps to build a picture of the dimensions of a system, and how they change over time. This enables understanding of how systems move and evolve over time.

Chaos and edge of chaos describe the order underlying the seemingly random behaviours exhibited by certain complex systems.

Complexity and agency: The final three concepts relate to the notion of adaptive agents, and how their behaviours are manifested in complex systems:

Adaptive agents react to the system and to each other, leading to a number of phenomena.

Self-organisation characterises a particular form of emergent property that can occur in systems of adaptive agents.

Co-evolution describes how, within a system of adaptive agents, co-evolution occurs, such that the overall system and the agents within it evolve together, or co-evolve, over time.

In great detail they explain every concept, give examples and discuss the implications of the concepts for the development system.

I like the paper because it really brings together all those important concepts in an accessible way. Although the paper is pretty long (89 pages all in all), it is not at all a boring read. In the conclusion part of the paper, the authors also describe the difficulty of presenting such an intricate matter as complexity sciences, itself being not a unified scientific discipline:

[…] it is useful to note that scientific knowledge is usually characterised with reference to the metaphor of a building. The ease with which the terms ‘foundations’, ‘pillars’ and ‘structures’ of knowledge are used indicates the prevalence of this architectural metaphor. Our difficulty was in trying to represent complexity science concepts as though they were parts of a building. They are, in fact, more like a loose network of interconnected and interdependent ideas. A more detailed look highlights conceptual linkages and interconnections between the different ideas. The best way to see how they fit together in the development and humanitarian field would be to try to apply them to a specific challenge or problem. […] Based on our reading, however, a grand edifice may never be erected along the lines of, for example, neoclassical economics. If this is the case, it may be that we need to become better accustomed to a network-oriented model of how knowledge and ideas relate to each other.

For me, it is intriguing how the science of complexity not only defies scientific practices by diverting from the pure deductive and inductive approaches and combining them but also evaded characterizations in ‘traditional’ scientific schemes such as the building mentioned above. This reminds me of the book ‘Complexity and Postmodernism’ by Paul Cilliers, which I started reading but I got stuck somewhere in the middle, overwhelmed by his theory and language. I hope that I will finish it some day and report on that here.

The authors also try to answer a number of questions around the topic of the application of complexity to development and what it means for example for international donors. A few quotes from the concluding remarks:

In our view, the value of complexity concepts are at a meta-level, in that they suggest new ways to think about problems and new questions that should be posed and answered, rather than specific concrete steps that should be taken as a result.

[…]

As well as use by implementing agencies, an understanding of complexity must also be built into the frameworks of the donors and others who hold the power to determine the shape of development interventions. This may be easier said than done – complexity requires a shift in attitudes that would not necessarily be welcome to many working in Northern agencies. For example, such a shift may require adjusting away from the ‘mechanistic’ approach to policy, or being prepared to admit that most organisations are learning about development interventions as they go along, or being transparent about the fact that taxpayers’ money may be spent on a project that does not guarantee results. It may mean having smaller, but better programmes.

[…]

At the start of our exploration, our view was simply that complexity would be a very interesting place to visit. At the end, we are of the opinion that many of us in the aid world live with complexity daily. There is a real need to start to recognise this explicitly, and try and understand and deal with this better. The science of complexity provides some valuable ideas. While it may be impossible to apply the complexity concepts comprehensively throughout the aid system, it is certainly possible and potentially very valuable to start to explore and apply them in relevant situations.

To do this, agencies first need to work to develop collective intellectual openness to ask a new, potentially valuable, but challenging set of questions of their mission and their work. Second, they

need to work to develop collective intellectual and methodological restraint to accept the limitations of a new and potentially valuable set of ideas, and not misuse or abuse them or let them become part of the ever-swinging pendulum of aid approaches. Third, they need to be humble and honest about the scope of what can be achieved through ‘outsider’ interventions, about the kinds of mistakes that are so often made, and about the reasons why such mistakes are repeated. Fourth, and perhaps most importantly, they need to develop the individual, institutional and political courage to face up to the implications.

I’d recommend anyone who works in international development and is interested in complexity to read this paper. It is a perfect entry point also for people with no background in complexity science.